06.30.2010 0

Too Hot Not to Note: Don’t let Obama’s tax increases go into effect

  • On: 07/27/2010 21:13:21
  • In: Taxes
  • ALG Editor’s Note: In the following featured editorial by the Foster’s Daily Democrat in New Hampshire, the board urges Congress to make permanent the Bush tax cuts:

    Don’t let Obama’s tax increases go into effect

    Nearly lost midst the political debate of health care, cap and trade, immigration and the like are the pending tax increases which will hit nearly all tax-paying Americans on Jan. 1.

    That is unless the much-excoriated Bush tax cuts are extended by the Democratically controlled House and Senate.

    If no action is taken rates will increase, some by double digits. For example, the lowest tax rate for individuals will jump by 50 percent, from 10 percent to 15 percent. Capital gains rates, greatly valued by seniors citizens, will jump by a third, from 15 percent to 20 percent. The child tax credit will be cut by 50 percent, from $1,000 to $500. And the marriage penalty will return.

    While Congress has time to stave off these increases, there appears to be no consensus, even among the Democrats who are in control.

    Some from Nancy Pelosi and Harry Reid’s party appear willing to side with Republicans. They rightfully argue that all the Bush tax cuts need to be extended, even if only temporarily, to help dig the country out of the recession.

    But Queen Nancy has said no to letting anyone she considers wealthy keep their money to invest in the economy.

    Unfortunately, that revives the debate over who is wealthy — one the Obama campaign and now presidency never settled.

    Among those caught in the “who is rich” debate will again be small businesses, notably LLCs, partnerships and proprietorships where the income of a business shows up on tax returns as that of the individual owners.

    Reportedly, President Obama has lowered his threshold for who is rich. His plan would raise rates for individuals making more than $200,000 and couples making more than $250,000 (A new marriage penalty?).

    While Congress has five months to settle the issue and extend the tax cuts, the longer it waits the more damage will be done to the economy.

    Businesses need lead time to plan for potentially debilitating tax increases. Individuals will also have to make plans. Five months is little time to do that.

    In this context it is worth noting that businesses collectively are already believed to be siting on over $1 trillion of ready cash.

    Their hesitancy to spend comes because of uncertainty over the economy and the pending costs of dealing with extensive government regulation. This regulation will come from health care reform and newly enacted financial regulations.

    The only saving grace may be that much of the next five months will be consumed by the election season.

    That gives voters one-on-one opportunities with elected officials and their challengers to lobby for fending off the upcoming Obama tax increases in order to help the economy rebound faster than the current snail’s pace.

    Copyright © 2008-2022 Americans for Limited Government